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KARACHI (May 14 2010): Now it's spinners and mills turn to face difficulties after the imposition of 15 percent Regulatory Duty (RD) by the cabinet on exports of all types of cotton yarn. In the meantime some mills entered the market to cover the short-position, dealers said on their local cotton market on Thursday.
The Karachi Cotton Association (KCA) official spot was unchanged at Rs 6700, they said. In the ready business, approximately 2000 bales of cotton changed hands at Rs 6500, they added. After the RD on exports of yarn, the value-added textile sector apparently feels somewhat soothed. On the other hand the spinners are under pressure as prices of best quality of cotton came down nearly Rs 400 to Rs 6500 within two weeks and yarn prices also cut down by 15 percent, cotton experts said.
Besides, cotton related people face confusions about the deals, which were finalised but now the RD may create problems for them, they said. Trading activity resumed as ginners showed slight flexibility in their attitude towards prices. It is likely, the ginners will try to bring down prices in anticipation of sharp fall in the rates, dealers said.
Moreover, Australia's cotton crop has been damaged by rain and flooding, and the 2009/10 harvest from the world's third largest exporter is seen around 1.5 million bales, below the 1.6 million bales earlier forecast, industry officials said.
"The growers in central Queensland have had some dreadful results in both terms of yield and quality," Gordon Cherry, Chief Executive of Dunavant Enterprises, the world's largest privately owned cotton merchandiser said on Wednesday. On Wednesday the NY cotton futures settled mixed as the focus of the market turned to spread trade between the spot July and new-crop December cotton contract, analysts said.
The benchmark July cotton contract slipped 0.16 cent to end at 80.37 cents per lb, trading from 80.29 to 82.49 cents. Volume traded in the July contract stood at 9,553 lots at 2:32 pm EDT (1832 GMT). New-crop December rose 0.99 cent to end at 77.29 cents, ranging from 76.30 to 77.45 cents. The following deals were reported : 574 bales of cotton from Haroonabad sold at Rs 6500 and 1330 bales from same station finalised at the same rate.
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